PRELIMINARY COPY
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant Filed by a Party other than the Registrant Check the
appropriate box:
Preliminary Proxy Statement
Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
DAY RUNNER, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Checkbox if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
DAY RUNNER, INC.
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
March 17, 1998
NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders (the
"Special Meeting") of Day Runner, Inc., a Delaware corporation (the "Company"),
will be held Tuesday, March 17, 1998, at 9:00 a.m., California time, at the
executive offices of the Company located at 15295 Alton Parkway, Irvine,
California 92618, for the following purposes, as more fully described in the
attached Proxy Statement:
1. To amend the Certificate of Incorporation of the Company to
(i) effect a two-for-one stock split of the outstanding shares of the Company's
Common Stock and (ii) increase the number of authorized shares of the Company's
Common Stock, par value $0.001 per share, from 14,000,000 to 29,000,000 shares.
2. To transact such other business as may properly come before
the Special Meeting and any adjournment(s) thereof.
Only record holders of Common Stock at the close of business on
February 10, 1998 are entitled to notice of, and to vote at, the Special Meeting
and at any adjournment(s) thereof.
All stockholders are cordially invited to attend the Special Meeting in
person. Whether or not you expect to attend the Special Meeting in person, in
order to ensure your representation at the Special Meeting, please mark, sign
and date the enclosed proxy card and return it as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the Special Meeting may vote in person even if such stockholder has returned a
proxy.
By Order of the Board of Directors
Catherine F. Ratcliffe
Secretary
Irvine, California
February 12, 1998
<PAGE>
DAY RUNNER, INC.
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited by and on behalf of the Board of
Directors of Day Runner, Inc. ("Day Runner" or the "Company") for use at the
Special Meeting of Stockholders (the "Special Meeting") to be held Tuesday,
March 17, 1998, at 9:00 a.m., California time, and at any adjournment(s)
thereof, for the purposes set forth herein and in the accompanying Notice of
Special Meeting of Stockholders. The Special Meeting will be held at the
principal executive offices of the Company located at 15295 Alton Parkway,
Irvine, California 92618.
These proxy solicitation materials are first being mailed on or about
February 12, 1998 to stockholders entitled to vote at the Special Meeting.
Only stockholders of record at the close of business on February 10,
1998 (the "Record Date") are entitled to notice of, and to vote at, the Special
Meeting. At the Record Date, _______ shares of Common Stock were issued and
outstanding.
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Special Meeting and voting in person.
VOTING AND SOLICITATION
On all matters, each share of Common Stock has one vote. Except as
otherwise required by law or the Company's Certificate of Incorporation or
Bylaws, the affirmative vote of a majority of shares present, in person or by
proxy, and entitled to vote at the Special Meeting is required for the approval
of matters submitted to the stockholders for a vote. Abstentions are counted as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum. Abstentions, however, do not constitute a vote "for" or
"against" any matter and thus will be disregarded in the calculation of a
plurality or of "votes cast." Broker non-votes are counted as shares that are
present and entitled to vote for purposes of determining a quorum. If a broker
indicates on the proxy that it does not have discretionary authority to vote on
a particular matter as to certain shares, those shares will be counted for
purposes of determining the presence of a quorum but will not be treated as
present and entitled to vote with respect to that matter (even though such
shares are considered present and entitled to vote for quorum purposes and may
be entitled to vote on other matters).
The costs of this solicitation will be borne by the Company. The
Company has retained the services of Corporate Investor Communications, Inc. to
assist in distributing proxy materials to brokerage houses, banks, custodians
and other nominee holders. The estimated cost of such services is $1,000 plus
out-of-pocket expenses. Although there are no formal agreements to do so, the
Company may reimburse brokerage houses and other persons representing beneficial
owners of shares for their expenses in forwarding proxy materials to such
beneficial owners. Proxies may be solicited personally or by telephone or
telegram by certain of the Company's directors, officers and regular employees,
without additional compensation.
COMMON STOCK OWNERSHIP OF
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of January 1, 1998 by (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
shares of the Company's Common Stock, (ii) each of the Company's directors,
(iii) the Company's Chief Executive Officer and each of the four other most
highly compensated executive officers for the fiscal year ended June 30, 1997,
and (iv) all current directors and officers of the Company as a group:
<TABLE>
<CAPTION>
<S> <C> <C>
Name of Beneficial Owner(1) Shares Beneficially Owned Percent of Class
- --------------------------- ------------------------- ----------------
Jill Tate Higgins(2) 990,407 17.4%
10153 1/2 Riverside Drive, #598
Toluca Lake, CA 91602
KAIM Non-Traditional, L.P.(3) 687,771 12.1
1800 Avenue of the Stars, 2nd Floor
Los Angeles, CA 90067
William Blair & Company(4) 633,290 11.2
35 South LaSalle Street
Chicago, IL 60603
Mark A. Vidovich(5)(6) 424,050 7.1
15295 Alton Parkway
Irvine, CA 92718
Felice Willat(7) 299,042 5.3
15295 Alton Parkway
Irvine, CA 92718
Alan R. Rachlin(5) (8) 283,010 4.8
Boyd I. Willat(9) 156,723 2.8
Dennis K. Marquardt(5)(10) 149,614 2.6
James E. Freeman, Jr.(5)(11) 94,971 1.6
Ronald M. Bianco(5) 61,716 1.1
Dennis G. Baglama(5) 31,570 *
James P. Higgins(12) 12,550 *
Charles Miller(5) 6,250 *
All current directors and officers 2,555,886 38.8
as a group (16 persons)(2)(5)(6)(7)(8)(9)(10)(11)(12)
* Less than one percent. (footnotes continue on next page)
</TABLE>
<PAGE>
(1) Such persons have sole voting and investment power with respect to all
shares of Common Stock shown as being beneficially owned by them, subject
to community property laws, where applicable, and the information
contained in the footnotes to this table.
(2) Includes (i) 6,250 shares for which warrants held by Ms. Higgins are
exercisable or become exercisable within 60 days after January 1, 1998;
(ii) 926,043 shares held by O.S. II, Inc., a California corporation of
which Ms. Higgins and one of her minor children are the sole owners; and
(iii) 58,114 shares held by Lakeside Enterprises, L.P., a California
limited partnership of which Ms. Higgins is the general partner and a
limited partner and of which O.S. II, Inc. is a limited partner. Does not
include 11,300 shares beneficially owned by James P. Higgins, Ms. Higgins'
husband, and 1,250 shares held by James P. Higgins as custodian for his
two minor children, as to which shares Ms. Higgins disclaims beneficial
ownership (see footnote 12 below).
(3) Based on a Form 13F dated November 13, 1997, wherein KAIM Non-Traditional,
L.P. reported that, as of September 30, 1997 and as an institutional
investment manager, it had sole investment discretion and voting authority
as to such shares.
(4) Based on a Form 13F dated November 14, 1997, wherein William Blair &
Company reported that, as of September 30, 1997 and as an institutional
investment manager, it had sole investment discretion as to such shares
and sole voting authority as to 353,900 of such shares.
(5) Includes 336,312, 212,666, 75,600, 86,921, 51,000, 31,570, 6,250 and
918,009 shares for which options or warrants beneficially owned by Messrs.
Vidovich, Rachlin, Marquardt, Freeman, Bianco, Baglama and Miller and all
current directors and officers as a group, respectively, are exercisable
or become exercisable within 60 days after January 1, 1998.
(6) Does not include 5,957 and 2,300 shares held by Mr. Vidovich's children
and by a trustee for the benefit of one of Mr. Vidovich's children,
respectively, as to which shares Mr. Vidovich disclaims beneficial
ownership.
(7) Includes (i) 20,000 shares for which options held by Ms. Willat are
exercisable or become exercisable within 60 days after January 1, 1998;
and (ii) 34,000 shares held by Mr. and Ms. Willat as trustees of trusts
for the benefit of their children and as to which shares Mr. and Ms.
Willat share voting and investment power. Does not include 122,723 shares
beneficially owned by Boyd I. Willat, Ms. Willat's husband, as to which
shares Ms. Willat disclaims beneficial ownership (see footnote 9 below).
(8) Does not include 2,060 shares held by a custodian for the benefit of Mr.
Rachlin's minor children.
(9) Includes (i) 6,250 shares for which warrants held by Mr. Willat are
exercisable or become exercisable within 60 days after January 1, 1998;
and (ii) 34,000 shares held by Mr. and Ms. Willat as trustees of trusts
for the benefit of their minor children and as to which shares Mr. and Ms.
Willat share voting and investment power. Does not include 265,042 shares
beneficially owned by Felice Willat, Mr. Willat's wife, as to which shares
Mr. Willat disclaims beneficial ownership (see footnote 7 above).
(10) Includes 2,300 shares held by Mr. Marquardt as trustee for one of Mr.
Vidovich's children.
(11) Includes 2,000 shares held by Mr. Freeman's wife for the benefit of their
minor children.
(12) Includes (i) 6,250 shares for which warrants held by Mr. Higgins are
exercisable or become exercisable within 60 days after January 1, 1998;
and (ii) 1,250 shares held by Mr. Higgins as custodian for his two minor
children. Does not include 990,407 shares beneficially owned by Ms.
Higgins as to which shares Mr. Higgins disclaims beneficial ownership (see
footnote 2 above).
<PAGE>
PROPOSAL 1 - APPROVAL OF AMENDMENT TO CERTIFICATE
OF INCORPORATION EFFECTING STOCK SPLIT AND INCREASING
THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
GENERAL
On January 19, 1998 and subject to the approval of the Company's
stockholders, the Board of Directors of the Company approved an amendment to
Article IV of the Company's Certificate of Incorporation (the "Amendment"). If
approved by the Company's stockholders at the Special Meeting, the Amendment
would (i) effect a two-for-one stock split (the "Stock Split") of the
outstanding shares of the Company's Common Stock, par value $0.001 per share,
and (ii) increase the number of authorized shares of the Company's Common Stock,
par value $0.001 per share, from 14,000,000 to 29,000,000 shares.
The Company's Certificate of Incorporation currently authorizes Company
to issue 15,000,000 shares of all classes of capital stock, of which 14,000,000
shares, par value $0.001 per share, are designated as Common Stock and 1,000,000
shares, $0.001 par value per share, are designated as Preferred Stock.
As of the Record Date, of the 14,000,000 shares of Common Stock the
Company is presently authorized to issue, ____________ shares were issued
and outstanding, 860,894 shares were held as treasury shares and an aggregate of
approximately 1,985,000 shares were reserved for issuance under the Company's
1995 Stock Option Plan, Amended and Restated 1986 Stock Option Plan and Employee
Stock Purchase Plan and upon the exercise of outstanding warrants. As of the
Record Date, no shares of Preferred Stock were outstanding. On January 28, 1998,
the closing sales price of the Company's Common Stock on The Nasdaq Stock Market
was $42.00 per share.
PRINCIPAL PURPOSES AND EFFECTS OF THE STOCK SPLIT
The Board of Directors anticipates that the increase in the number of
outstanding shares of Common Stock resulting from the Stock Split would place
the market price of the Company's Common Stock in a range more attractive to the
financial community and the investing public and may result in a broader market
for the Company's Common Stock than that which currently exists. The decreased
price level resulting from the Stock Split may encourage and facilitate trading
in the Company's Common Stock and possibly promote greater liquidity for the
Company's stockholders.
The Stock Split would double the number of issued and outstanding
shares of the Company's Common Stock. Following the Stock Split and based on the
number of shares outstanding at the Record Date, the number of shares of the
Company's outstanding Common Stock would increase to ____ shares. The Stock
Split would not change the equity interests of the stockholders in the Company
and would not affect the relative rights of any stockholder or result in a
dilution or diminution of any stockholder's proportionate interest in the
Company. Since the Stock Split would result in each stockholder's interest being
represented by a greater number of shares, it is possible that higher brokerage
commissions might be payable after the Stock Split upon a sale or transfer of a
stockholder's same relative interest in the Company's Common Stock because that
interest would be represented by a greater number of shares.
As a result of the Amendment, the number of shares issuable under the
Company's 1995 Stock Option Plan, Amended and Restated 1986 Stock Option Plan
and Employee Stock Purchase Plan, as well as the number of shares issuable upon
the exercise of outstanding options under those plans and upon the exercise of
outstanding warrants of the Company, would be proportionately adjusted to
reflect the Stock Split. The exercise price of all outstanding options and
warrants would also be proportionately adjusted to reflect the Stock Split.
The Amendment would not affect the number of shares of Preferred Stock
which the Company is authorized to issue and would not adjust the $0.001 par
value of the Company's Common Stock. Upon effectiveness of the Stock Split,
however, an amount equal to the par value of the shares of Common Stock issued
as a result of the Stock Split would be transferred from the Company's
additional paid-in capital account to the Company's paid-in capital account.
TAX CONSEQUENCES
The Company has been advised by tax counsel that, under current federal
income tax laws, a stockholder's receipt of additional shares of the Company's
Common Stock as a result of the Stock Split would not constitute taxable income
to the stockholder; that the cost or other tax basis to a stockholder of each
share of the Company's Common Stock held immediately prior to the Stock Split
would be divided equally between the corresponding two shares of the Company's
Common Stock held immediately after the stock split; and that the holding period
for each of the two shares of the Company's Common Stock held immediately after
the stock split would include the period for which the corresponding one share
of Common Stock was held prior to the Stock Split. The laws of jurisdictions
other than the United States may impose income taxes on the receipt by
stockholders of additional shares of Common Stock resulting from the stock
split. Stockholders should consult their own tax advisors as to the federal,
state, local and foreign tax effects of the Stock Split in light of their
individual circumstances.
PRINCIPAL PURPOSES AND EFFECTS OF THE INCREASE IN THE
AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The Board of Directors believes that the increase in the authorized
number of shares of Company's Common Stock from 14,000,000 to 29,000,000 shares
is necessary to provide the Company with (i) authority to issue a number of
shares sufficient to effect the Stock Split and (ii) a reserve for shares to be
issued under the Company's stock option and other stock related incentive and
benefit plans and in connection with any future stock dividends or stock splits,
financings, acquisitions, management incentive or employee benefit plans and for
other general corporate purposes. No further action by stockholders would be
necessary prior to the issuance of additional shares of the Company's Common
Stock except as may be required by law or by the applicable regulations of The
Nasdaq Stock Market.
The Board of Directors has no present plans for issuing any of the
additional shares of Common Stock which would be authorized by the Amendment
except as would be required in connection with the Stock Split and as would be
required in connection with Common Stock presently reserved for issuance under
the Company's 1995 Stock Option Plan, Amended and Restated 1986 Stock Option
Plan and Employee Stock Purchase Plan and upon the exercise of outstanding
warrants.
The proposed additional shares of Common Stock would be a part of the
existing class of the Company's Common Stock and, if and when issued, would have
the same rights and privileges as the shares of Common Stock presently issued
and outstanding.
DELIVERY OF ADDITIONAL SHARE CERTIFICATES
The Amendment would become effective upon the filing with the Delaware
Secretary of State of a Certificate of Amendment to the Company's Certificate of
Incorporation. If the Amendment is approved by the stockholders at the Special
Meeting, the Company intends to file the Certificate of Amendment as soon as
practicable after such approval is obtained and expects that the filing would be
made on or about March 18, 1998. Each stockholder of record as of the close of
business on the date of such filing (the "Effective Date") would receive an
additional stock certificate representing one additional share of the Company's
Common Stock for each share of the Company's Common Stock held by such
stockholder as of the Effective Date. For example, if a stockholder owned 100
shares of the Company's Common Stock on the Effective Date, the Company would
mail to the stockholder a share certificate for 100 additional shares and the
stockholder would then be the owner of 200 shares of the Company's Common Stock.
The Company's stockholders would retain the stock certificates issued to them
prior to the Effective Date, and those certificates would continue to represent
the number of shares evidenced thereby. It is anticipated that stock
certificates representing the additional shares to be received by each
stockholder as a result of the Stock Split would be mailed to stockholders on or
about March 30, 1998.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
If the Amendment is approved by the stockholders at the Special
Meeting, Article IV of the Company's Certificate of Incorporation, as amended,
would read in full as follows:
"The total number of shares of all classes of stock
which the corporation is authorized to issue is 30,000,000
shares, consisting of 29,000,000 shares of Common Stock having
a par value of $0.001 per share (the `Common Stock') and
1,000,000 shares of Preferred Stock having a par value of
$0.001 per share (the `Preferred Stock'). Upon amendment of
this Article IV, each outstanding share of Common Stock is
split up and converted into two shares of Common Stock.
The Board of Directors is authorized by resolution or
resolutions from time to time adopted, subject to any
limitation prescribed by law, to provide for the issuance of
the shares of Preferred Stock in series, and by filing a
certificate pursuant to the applicable law of the State of
Delaware, to establish from time to time the number of shares
to be included in each such series, and to fix the
designations, powers (including voting powers), preferences
and relative, participating, optional or other special rights
of the shares of each such series and the qualifications,
limitations and restrictions thereof. The number of authorized
shares of Preferred Stock may be increased or decreased (but
not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock, without a vote of the
holders of Preferred Stock, or of any series thereof, unless a
vote of any such holders is required pursuant to the
certificate or certificates establishing any series of
Preferred Stock."
AT THE SPECIAL MEETING, THE STOCKHOLDERS WILL BE REQUESTED TO CONSIDER
AND APPROVE THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
EFFECTING THE STOCK SPLIT AND INCREASING THE AUTHORIZED NUMBER OF SHARES OF THE
COMPANY'S COMMON STOCK. THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE
PROPOSED AMENDMENT IS IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS
AND RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT. APPROVAL OF THE PROPOSED
AMENDMENT TO THE CERTIFICATE OF INCORPORATION REQUIRES THE AFFIRMATIVE VOTE OF
THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF COMMON STOCK ENTITLED TO
VOTE AT THE SPECIAL MEETING.
DEADLINE FOR RECEIPT OF STOCKHOLDER
PROPOSALS FOR 1998 ANNUAL MEETING
As previously disclosed to stockholders, proposals of stockholders of
the Company which are intended to be presented by such stockholders at the
Company's annual meeting of stockholders to be held in 1998 must be received by
the Company no later than June 17, 1998 in order that they may be considered for
inclusion in the proxy statement and form of proxy relating to that annual
meeting. It is recommended that stockholders submitting proposals direct them to
the Secretary of the Company via certified mail, return receipt requested, in
order to ensure timely delivery.
OTHER MATTERS
The Company currently knows of no matters to be submitted at the
Special Meeting other than those described herein. If any other matters properly
come before the Special Meeting, it is the intention of the persons named on the
enclosed proxy card to vote the shares they represent as the Board of Directors
may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
Catherine F. Ratcliffe
Secretary
Irvine, California
February 12, 1998
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
DAY RUNNER, INC.
1998 Special Meeting of Stockholders
The undersigned stockholder of Day Runner, Inc., a Delaware corporation
(the "Company"), hereby acknowledges receipt of the Notice of Special Meeting of
Stockholders and Proxy Statement, each dated February 12, 1998, and hereby
appoints Mark A. Vidovich and Dennis K. Marquardt, and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Special Meeting of
Stockholders of the Company to be held Tuesday, March 17, 1998, at 9:00 a.m.,
California time, at the principal executive offices of the Company located at
15295 Alton Parkway, Irvine, California 92618, and at any adjournment(s)
thereof, and to vote all shares of Common Stock to which the undersigned would
be entitled, if then and there personally present, on the matters set forth
below:
1. APPROVAL OF AMENDMENT TO THE COMPANY'S CERTIFICATE
OF INCORPORATION EFFECTING STOCK SPLIT AND INCREASING
THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
__FOR __AGAINST __ABSTAIN
To approve an amendment to the Company's Certificate of Incorporation
which would (i) effect a two-for-one stock split of the outstanding shares of
the Company's Common Stock and (ii) increase the number of authorized shares of
the Company's Common Stock, par value $0.001 per share, from 14,000,000 to
29,000,000 shares, as described in the Proxy Statement.
2. OTHER BUSINESS
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment(s) thereof.
Any one of such attorneys-in-fact or substitutes as shall be present
and shall act at said meeting or any adjournment(s) thereof shall have and may
exercise all powers of said attorneys-in-fact hereunder.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR PROPOSAL 1 AND AS SAID PROXIES DEEM ADVISABLE ON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated:________________, 1998 ________________________________________
(Signature)
________________________________________
(Signature)
(This Proxy should be marked, dated and signed by the
stockholder(s) exactly as his or her name appears hereon and
returned promptly in the enclosed envelope. Persons signing in a
fiduciary capacity should so indicate. If shares are held by joint
tenants or as community property, both should sign.)
DO NOT FOLD, STAPLE OR MUTILATE
